Led by dairy products, prices for export commodities surged last month - and this time the rise in world prices was not eaten up by a higher exchange rate.

ANZ's commodity price index surged 7.4 per cent, the third-strongest monthly rise since the index began in 1986.

It is now only 6 per cent below its all-time high in April, 2011.

The dollar eased in value against the United States and Australian dollars in March, though it appreciated against other currencies.

The net effect was a small drop in the trade-weighted exchange rate, so that in New Zealand dollar terms the ANZ index rose 8.7 per cent. It is still 16 per cent below its peak in March 2011. Whole milk powder prices led the way with a 23 per cent increase on February.

The average winning price from the co-operative's fortnightly GlobalDairyTrade auctions has now increased by 77 per cent since last May, and prices for whole milk powder have doubled in US dollar terms.

"On the production front Fonterra's results showed a solid first-half for 2012-13, with national milk production up 6.5 per cent on last year's record result," Bagrie said.

"However, they also [saw] a very soft second-half for the season, assuming milk production would be back 14 per cent due to the drought and an increasing number of farmers drying off earlier than expected."

All up, total milk production over the 2012-13 season was likely to fall slightly below the record 2011-12 season.

This, combined with the lower dairy payout, represented about a $500 million hit to dairy incomes compared with last season, Bagrie said.

Meanwhile, domestic beef prices had wilted faster than the grass over the past two months, he said.

"The surge in beef cattle and cull cow slaughter due to the dry conditions across the North Island is placing pressure on plant capacity and the prices meat processors are willing to offer," Bagrie said.

"In contrast, in-market price indicators for the main cuts and co-products have all improved, and the New Zealand dollar has been slightly softer. This suggests that when the cull cow turn-off slows, schedule prices [will] bounce back."

The drought has had the same impact on the lamb price as beef prices, Bagrie said.

"The surge in supply, combined with a lower pound sterling and euro has seen farm gate prices hit a five-year low," he said.